Well first off every Me First and the Gimme Gimmes album. Those being Have a Ball, Are a Drag, and Blow in the Wind
I looooove Bono's cover of Hallelujah (Check out Tower of Song for that one.)
U2's Dancing Bearfoot = increadible.
The Indigo Girls' cover of Tangled up in Blue and their cover of Romeo and Juliet.
The Slackers Wanted Dead or alive is fucking phenominal as well. Better than the original I tell you.